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CMS Pronouncements on Pioneer ACO Results and 2014 HIX Premiums

By Clive Riddle, July 18, 2013

This week CMS announced results from the first performance year of the Pioneer Accountable Care Organization (ACO) Model, along with a new report that finds premiums in the Health Insurance Marketplace will be nearly 20 percent lower in 2014 than previously expected.

Here are the Pioneer ACO results that CMS is touting:

  • Costs for the more than 669,000 beneficiaries aligned to Pioneer ACOs grew by only 0.3 percent in 2012 where as costs for similar beneficiaries grew by 0.8 percent in the same period.
  • 13 out of 32 pioneer ACOs produced shared savings with CMS, generating a gross savings of $87.6 million in 2012 and saving nearly $33 million for Medicare
  •  Pioneer ACOs earned over $76 million in compensation.
  • Only 2 Pioneer ACOs had shared losses totaling approximately $4.0 million.
  • All 32 Pioneer ACOs successfully reported quality measures and achieved the maximum reporting rate for the first performance year, with all earning incentive payments. 
  • Overall, Pioneer ACOs performed better than published rates in fee-for-service Medicare for all 15 clinical quality measures for which comparable data are available.
  • 25 of 32 Pioneer ACOs generated lower risk-adjusted readmission rates for their aligned beneficiaries than the benchmark rate for all Medicare fee-for-service beneficiaries.
  • The median rate among Pioneer ACOs on blood pressure control among beneficiaries with diabetes was 68 percent compared to the comparison value of 55 percent as measured in adult diabetic population in 10 managed care plans across 7 states from 2000 to 2001. 
  •  Pioneer ACOs performed better on clinical quality measures that assess low density lipoprotein (LDL) control for patients with diabetes. The median rate among Pioneer ACOs for LDO control among beneficiaries with diabetes was 57 percent compared to 48 percent in an adult diabetic population in 10 managed care plans across 7 states from 2000 to 2001.
  • Pioneer ACOs were rated higher by ACO beneficiaries on all four patient experience measures relative to the 2011 Medicare fee-for-service results.

CMS did disclose that seven Pioneer ACOs that did not produce savings intend to switch to the Medicare Shared Savings Program, and two Pioneer ACOs have indicated their intent to leave the program. 

The Wall Street Journal  didn’t interpret these results as rosily as did CMS. Here is the WSJ take, from their July 16th article Mixed Results in Health Pilot Plan: “All of the 32 health systems in the so-called Pioneer Accountable Care Organization program improved patient care on quality measures such as cancer screenings and controlling blood pressure, according to data to be released Tuesday by the Centers for Medicare and Medicaid Services. But only 18 of the 32 managed to lower costs for the Medicare patients they treated—a major goal of the effort. Two hospitals lost money on the program in the first year. Seven have notified CMS that they intend to move to another program where they will face less financial risk. Two others have indicated they intend to leave the program,”

On the Health Insurance Marketplace front, CMS touted findings from a just released twelve-page ASPE Issue Brief: Market Competition Works: Proposed Silver Premiums in the 2014 Individual and Small

Group Markets Are Nearly 20% Lower than Expected. CMS notes the report found that:

  • In the 11 states (including the District of Columbia) that have made information available for the individual market, proposed premiums for 2014 are on average 18 percent lower than HHS’ estimate of 2014 individual market premiums derived from CBO publications.
  • In the six states that have made information available in the small group market, proposed premiums are estimated to be on average 18 percent lower than the premium a small employer would pay for similar coverage without the Affordable Care Act.
  • Preliminary premiums appear to be affordable even for young men. For example, in Los Angeles - the county with the largest number of uninsured Americans in the nation - the lowest cost silver plan in 2014 for a 25-year-old individual costs $174 per month without a tax credit, $34 per month for an individual whose income is $17,235, and a catastrophic plan can be purchased for $117 per month for an individual.

Here a chart provided in the ASPE report, comparing the ASPE premium estimate for Individual Silver premiums compared to actual premiums for applicable states:

Reader Comments (1)

Thanks for sharing! The University of Michigan Health System (UMHS) is participating in the Pioneer Accountable Care Organization (ACO) Model. An ACO is set up by a group of health care providers who believe that by working together, they will be able to provide better care for us. Keep sharing.

August 27, 2013 | Unregistered CommenterCayla Cook

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